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(Reuters) - A federal judge on Thursday dismissed a lawsuit by Quicken Loans Inc against the U.S. Justice Department that alleged the company was being forced to make a big settlement over its mortgage lending and underwriting practices.
Quicken had sued the Justice Department and the Department of Housing and Urban Development in April, saying it was pressured to "make public admissions that were blatantly false, as well as pay an inexplicable penalty or face legal action."
The company's lawsuit was filed a few days before the Justice Department sued the mortgage lender for filing false claims on government-insured mortgages and other violations.
Judge Mark Goldsmith on Thursday granted the Justice Department's motion to dismiss Quicken's initial complaint.
Quicken, one of the largest U.S. mortgage lenders, said it would defend itself against the Justice Department's lawsuit and explore options in its claims against the government.
The Justice Department's complaint had said Quicken Loans submitted or caused the submission of claims for hundreds of improperly underwritten loans insured by the Federal Housing Administration from September 2007 to December 2011.
The government had said in its April court filing that Quicken Loans' senior executives knew about the misconduct, which included asking appraisers to inflate home values that were initially too low to meet the underwriting requirements for the company to approve a loan.
As a result, the Department for Housing and Urban Development paid millions of dollars of insurance claims on improperly underwritten loans, the DoJ had said in its court filing.
Quicken had concealed its deficient underwriting practices and failed to report a single underwriting deficiency to the government agency, according to the complaint.
The case is Quicken Loans Inc v. United States of America et al, U.S. District Court, Eastern District of Michigan Southern Division, No. 15-cv-11408.
Reporting by Ramkumar Iyer in Bengaluru; Editing by Anil D'Silva